Asian stocks rise supported by the expectation of a US interest rate cut

Asian stocks have risen to three days of decline, powered by market optimism over the possibility that US federal reserve interest rates have reduced, increasing sentiment and overcoming renewed trade tensions between the United States and China. MSCI’s Asia Regional Equity Index rose 1.3% after the chairman of Federal Reserve Jerome Powell’s concerns about a poor job market increased the expectation of a rate cut in October. Futures for the S&P 500 and Nasdaq 100 indices also rose in Asian trading, by 0.1%, as investors ignored the fear of trade war after US President Donald Trump said he would stop cooking in China. Also read: Trump threatens to ban the import of cooking oil from China into a new escalation of the trade. Profits for currencies and gold amid trading uncertainty. Foreign Yuan continued its profits after China strengthened its currency defense on Wednesday amid trade tensions, while the dollar index took down and Gold recorded a new high. Two years US Treasury bond yields have also stabilized near their lowest levels since 2022, while crude oil remained near its lowest levels in five months. Since the tariff-activated sale in April, global shares have recovered strongly, supported by optimism about artificial intelligence and expectations of further financial relief after lowering the rate of September. However, this wave faces the wind with a renewed trade tension between Washington and Beijing, with both sides increasing their rhetoric and an indication of possible new restrictions on biotechnology. “Macroscopic uncertainty remains the biggest obstacle to high-risk assets,” says Dylan Wu, a strategist at Pepperstone Group. “With the rate cutting bets and strong earnings supporting the sentiment, I believe the decline in US stocks will remain limited.” The yuan sends a ‘signal of power’ in China. The currency has risen after the Chinese central bank determined the PEG rate at 7.0995 Yuan on the dollar, which is stronger than the 7.1 level that carefully monitors the market, amid the increasing trading tension with the United States. This is the first time since November that the bank has determined the rate at a level stronger than 7.1 to the dollar, after maintaining this limit since the end of August. “Under 7.10 sends a clear sign of strength, as a strong yuan symbolizes that China is in a strong position in any negotiations or mutual escalation,” says Fiona Lim, senior foreign exchange analyst at Maybank in Singapore. The weakness of the dollar supports gold and stocks. According to Bloomberg analysts, the Fed’s tendency is to facilitate a new Gulf of dollar weakness, which paves the way for hedge strategies focused on gold. The tendency to buy shares, despite the fear of an artificial intelligence bubble, seems to be regaining the momentum. ” The “Market Live” team, led by Garfield Reynolds, added: “The combination of the interest rate cut and drop in the dollar increases the risk appetite in the markets.” Deflation facilitates China and Outlook improves the rate of deflation in China, which was relieved in September, and has put the country on track to record the longest period of price loss since the late 1970s reforms. On the other hand, in previous statements, Jerome Powell indicated that the US Central Bank is moving by a quarter of a percentage point this month after an extra interest rate cut, even if government closure reduces the ability of officials to evaluate the performance of the economy. Swaps currently price approximately 1.25 percentage points of rate cuts by the end of next year, from the current range of 4% to 4.25%. Powell said the economic outlook has not changed much since the September meeting, when the Fed lowered interest rates and expected more cuts this year. Susan Collins, president of the Federal Reserve of Boston, said the bank should continue this year to lower the rates to support the labor market. “Investors saw Powell’s remarks as in line with a continuing rate cut during the upcoming FOMC meetings this year,” Anz Group’s analysts wrote in a note. Washington and Beijing: Careful optimism and signs of calm. Parallel has followed investors the new trade developments, as US trade representative Jameson Greer expected that tensions with China would decrease over export restrictions after discussions between representatives of the two countries. Also read: Trump and XI ignite a new trade crisis and the global economy is on fire. Trump also expressed careful optimism and said, ‘We have a good relationship with China, and I think things will go well, and if not, that’s fine. There are many bumps that have been exchanged, but we were very successful. ‘ Europe and Japan under the microscope the European Union is considering forcing Chinese businesses to hand over technologies to European businesses if they want to work in the union countries, in a move aimed at improving the competitiveness of the European industry. In Japan, investors are awaiting the 20-year government bond auction amid political uncertainty following the sudden collapse of the ruling coalition. Long-term mortgages fell after Sanae Takaishi’s surprise victory in the liberal Democratic Party election at the beginning of the month, while her chances of becoming prime minister decreased after the collapse of the 26-year-old coalition last week. In light of this scene, the heads of the most important opposition parties are expected to meet on Wednesday to discuss the possibility of uniting political positions and choosing a joint candidate to offer the government.